Americans’ Trust in Credit Unions and Local Banks Increases

The Kellogg School of Management at Northwestern University and the University of Chicago School of Business yesterday released the results of their latest survey in the Chicago Booth/Kellogg School Financial Trust Index. The index was established to monitor Americans’ confidence in financial institutions and large corporations quarterly, to see the impact of investors’ decisions.

Over the last quarter, trust in credit unions increased from 58% to 63% and trust in local banks increased from 51% to 55%. At the same time, Americans confidence in national banks and banks in general declined. The researchers and others speculate that this may be due to the fact that the survey this quarter was conducted at the same time as the House Financial Services Committee’s hearings on the “London Whale” scandal. However, as one of the author’s said, “there is still a relatively high level of trust in banks at the community level.

Below is a figure created by the authors demonstrating the changes in the percentage of people trusting different financial institutions.

The Financial Trust Index also shows that these results are part of a larger trend. Their results published since December 2009 consistently report Americans have higher confidence in local banks and credit unions than national banks. ” Hopefully the survey in the future will look into why Americans consistently trust credit unions and local banks more than national banks.